Growing the business of today and the business of tomorrow

  Companies often approach growth as one of two opposite extremes – they either execute better and deliver more from their existing business or charter a team of big thinkers to look deep into the future.
We believe that, in isolation, both of these approaches to growth are likely to fall short of expectations. Instead, companies should strive for duality of growth – to fortify and expand the business as it exists today while creating the business as it will exist in the future.
In growing the business of today together with the business of tomorrow, a company should address the following:
l   Establish the right growth target with clarity
l  Formulate a growth strategy that accounts for uncertainty and complexity
l  Balance a growth portfolio with both near- and long-term views
l   Plot an executable growth strategy

Establish the right growth target with clarity
Company growth objectives are often simplistic and capricious, for example: “We will double last year’s rate of growth or achieve double-digit increases”.
Instead, a realistic growth target should emerge from the interplay between internal and external factors and expectations.
From within, a company should take into account its state of lifecycle maturity, its culture and innovation capabilities. Externalities may include the industry’s overall momentum, investor expectations, the state of the economy, the intensity of competition and regulation, innovation or disruption.
Together, these inputs create the context that helps determine whether a company can produce superior growth performance to create additional value by surpassing investors’ growth expectation.

Formulate a growth strategy that accounts for uncertainty and complexity
In formulating a growth strategy, companies should consider looking at growth through a comprehensive view that takes into account uncertainty and complexity of creating growth.
 On one axis is “products/business models” and on the other axis is “customers/markets”.
Accordingly, at the lower left, companies are engaging in core growth with relatively little uncertainty – where existing offerings meet existing customers.
At the upper right, growth is more uncertain – where entirely new offerings meet non-consumers.
 In between lays the realm of adjacent offerings and markets that aren’t new to the world, but are new to a particular company. Applying this discrete lens to formulate a growth strategy allows a company to match its capabilities and opportunities, then allocate efforts to balance “today’s growth” with “tomorrow’s growth”.

Balance a growth portfolio with both near- and long-term views
To construct the growth portfolio that best suits a company, a leader should take the overall growth target – for example, 10 per cent – and deconstruct it to identify which initiatives will produce the required growth.
Company A might walk a conservative line, targeting 5-per-cent growth from existing products and markets, then dividing the remaining 5 per cent among the mid-range strategies in adjacent spaces.
Alternatively, Company B might begin with the same 10-per-cent goal and weight its strategy more toward new products or new markets, inhabiting the upper right of the graph and embracing the higher potential upside – and higher risk.
This idea of a targeted growth portfolio isn’t new, but this “duality of growth” lens adds more specific rigor to the ways in which companies seek and achieve that balance.
Plot an executable strategy

To take a growth plan from theory to execution, an organisation must recognise the duality that both joins and separates today and tomorrow. A company must identify the capabilities it needs and either build or obtain them. For each growth lever a company has decided to pursue, there may be an entirely separate set of required capabilities. Organizations must then define the leadership and talent required to pursue these opportunities.
By considering growth strategies through a duality lens, companies can identify the key opportunities and measures in each part of the business – whether today or tomorrow – and plot an executable plan that better matches investments and capabilities.

Deloitte Thailand contributed this article.